Winona Area Public Schools (WAPS) Board of Education is pondering whether to spend up to $14 million on building upgrades to provide energy efficiency at WAPS buildings. If the building upgrades, are approved, WAPS would take advantage of a Minnesota statute that allows districts to enter into agreements for energy savings projects without seeking the lowest bidder as long as the energy savings company guarantees that the savings will pay for the upgrades over a 15-year span.
However, investing in elementary schools over a 15-year period is prompting a discussion about the future of WAPS' historic elementary schools, and whether they will be closed within that time frame.
Four different options were presented to the board, earlier this month, ranging from $3.4 million for building upgrades for option one (with interest and other fees the district would pay $5.4 million) to $10.4 million ($14.4 million with interest and fees over 15 years) for option four. The options were presented by Energy Services Group (ESG), a subsidiary of Honeywell, with which the district has already partnered on $1.5 million in upgrades to Jefferson Elementary and Winona Senior High School. The additional options presented earlier this month have not yet been approved by the School Board.
Many of the upgrades include energy efficiency projects that would improve the heating and ventilation systems of the buildings, along with lighting upgrades and electrical system changes. The more expensive projects are focused on the high school and middle school with shorter term band-aid, projects for the district’s elementary buildings.
Some of the more expensive options would nearly deplete various portions of the district’s property tax levy, and all options would require borrowing through bonds to cover the up-front costs.
Each option includes applying $525,000 in health and safety property tax levy dollars over the 15-year time frame. Kevin McGully, of ESG, said that the board could use those health and safety levy dollars with a board vote alone, and a public vote for those projects would not be required.
However, at least one other project undertaken by ESG, which used health and safety levy dollars for a similar project by a Minnesota school district, resulted in a successful citizen lawsuit against the district.
Yellow Medicine East School District partnered with ESG for an $11.57 million set of projects to increase the energy efficiency of its buildings. At the suggestion of ESG, the district levied $2.8 million in health and safety levy funds from property taxpayers to help fund the projects. Citizens sued the district, and in January 2012 Judge Randall Slieter sided with the citizen group in a ruling that stated the law required that the health and safety levy funds must be approved by voters through a referendum, and that the district had collected the money illegally.
The WAPS projects proposed by ESG would also use other portions of the levy, such as capital expenditure bonds and deferred maintenance funds. The bulk of the levy increases would be applied in 2018, after the middle school bonds are paid off, which McGully said would help avoid a large increase in property tax spending.
Board member Jay Kohner asked what would happen if the district signed on to a plan that relied on health and safety and other portions of the district levy over 15 years and the legislature reduced the amount it could levy in future years. “We’re still on the hook to pay off the bond, correct?” he asked.
WAPS Finance Officer Dan Pyan said that the legislature had given the authority to levy those dollars, but it was possible the formula could be changed. The health and safety projects have to be approved by the board, he explained. Concerning the deferred maintenance funds proposed to be used, Payne said, “I don’t know how stable it is.”
Kohner questioned what would happen if the district committed to the 15-year payback arrangement and then decided to close and sell an elementary building. That is why the plans opted for less expensive band-aid options for elementary schools, responded McGully. Some of the upgrades would still be valuable to future owners, but the board could decide not to make any investment in those elementary school options if it didn’t want to, he added.
Older buildings are built to last, investing in them may or may not be the right decision for WAPS, McGully explained. If there was a hurricane, old, solidly-built buildings are where people would want to be, McGully quipped. The firm has done about $250 million in improvements in Minnesota schools; they’ve built some new buildings, but they’ve focused mainly on existing buildings. “Investment in an older facility — it isn’t a bad thing,” McGully added.
Investment in air conditioning and new boiler
School Board members have discussed several ideas for implementing a year-round or modified calendar at one or all of the district's school buildings, which could require the installation of air conditioning units.
Although not identified as a component of any of the four suggested project options, ESG also identified the projected costs of adding various air conditioning units to WAPS elementary buildings, and last week promised to bring the board more information on the options.
ESG options three and four insure that the entire high school and Goodview Elementary will be dehumidified and that the middle school is operating to specified conditions.
Last week, the School Board approved the replacement of the boiler at Jefferson Elementary. A $75,000 grant will go toward the cost of the boiler at Jefferson.